What happens if your spouse dies during your divorce and has changed the beneficiary on your retirement accounts?

Experienced Bay Area Family Law attorneys will tell clients that after they decide to file for divorce, you cannot change the beneficiary on your life insurance, retirement, or annuities until after the divorce is final unless you have consent from your soon to be ex spouse.  But what happens when someone does not follow these rules?

In one case a deceased spouse violated the divorce process rules by changing the beneficiary of his community property IRA (which has a balance of $2 million) from the other spouse client to the parties' minor children in trust.

In order to recover the funds, the family law case was put on hold and instead the case was transferred to the Probate department to resolve the dispute between the Trust of the minor children and the spouse who thought she was going to receive the funds.

Contact me at amanda@gordonfamilylaw.com for more information.

How are social security benefits handled in divorce?

Many Bay Area clients ask about their social security benefits in a divorce.  

In a California divorce, you are eligible to collect benefits based on your ex-spouses work record if (1) you have been married at least 10 years, (2) you have been divorced for at least 2 years, (3) you are at least 62 years old, and (4) you are currently unmarried.

The government provides an excellent resource here:

https://www.ssa.gov/planners/retire/divspouse.html

Contact me at amanda@gordonfamilylaw.com for more information.

My marriage license was never turned in by the officiant, am I married?

Yes, under most circumstances, even if you had a technical defect in your Marriage License you are legally married under California family law.

The typical process for filing a Marriage License and Certificate looks like this:

1.     The Parties apply for a license,

2.     The wedding ceremony occurs,

3.     The officiant sends the license back to the County Clerk,

4.     The officiant then signs the registration, turning the Marriage License into a Marriage Certificate,

5.     The County records this document with the County Recorder’s Office.

6.     The County Clerk sends all original confidential marriage certificates retained, or originals of reproduced confidential marriage certificates filed after January 1, 1982, to the State Registrar of Vital Statistics (Family Code § 511).

If you have a wedding ceremony in California and you have applied for a marriage license, you are most likely married under California family law even if you fail to send in that license to the County. This is because there is at least one family law case that holds that registration of a marriage certificate is not essential to the validity of a marriage. In 2011, an Appellate Court found that parties who, after marriage ceremony in 1991, submitted marriage certificate for registration that was twice rejected for technical defects and was not resubmitted, and who were married in new ceremony about 10 years later, had been married for 17 years at time of dissolution of their marriage in 2008. In re Marriage of Cantarella (2011) 191 C.A. 4th 916, 923.

There is also a California Health and Safety Code section (§103450) that specifically allows for a party to bring an action requesting an order judicially establishing the fact of, and time and place of, the marriage. The definition of a party includes: “[a] member of a law enforcement agency or a representative of another governmental agency, as provided by law, who is conducting official business.” Health and Safety Code 103526(c)(2)(C).

What does that mean? Well, being married under California law requires you to file taxes with the State and Federal government as married. IRS Publication 17, page 20 states: “State law governs whether you are married or legally separated under a divorce or separate maintenance decree.” 

It also means that you will have to use California's dissolution rules in the family code if you decide to formally and legally separate. 

Contact me at amanda@gordonfamilylaw.com for more information.

How can I fix my defective marriage license?

Did you fail to turn in your marriage license? 
The California Family Code provides the following guidance on defects in Confidential Marriage Licenses (Family Code 360 and 510):
 
510.  (a) If a confidential marriage license is lost, damaged, or destroyed after the performance of the marriage, but before it is returned to the county clerk, or deemed unacceptable for registration by the county clerk, the person solemnizing the marriage, in order to comply with Section 506, shall obtain a duplicate marriage license by filing an affidavit setting forth the facts with the county clerk of the county in which the license was issued.  
 
(b) The duplicate license may not be issued later than one year after issuance of the original license and shall be returned by the person solemnizing the marriage to the county clerk within one year of the issuance date shown on the original marriage license.    (c) The county clerk may charge a fee to cover the actual costs of issuing a duplicate marriage license.    (d) If a marriage license is lost, damaged, or destroyed before a marriage ceremony takes place, the applicants shall purchase a new marriage license and the old license shall be voided.

 Before one year of the issue date of the marriage license you can file and affidavit for a duplicate of the marriage license under Family Code 360 and 510, and if it has been more than one year, you can use the declaration of marriage form (VS 116) FC Section 425. You can also use the Court order delayed certificate of marriage form (VS 122).  

Contact me at amanda@gordonfamilylaw.com for more information.

Marriage, Divorce, and Taxes: Why December 31st 2015 is different than January 1st 2016

Getting married in 2015? Or considering finalizing your divorce in 2015? Your status makes a difference for your taxes.

The most important thing to remember is that your marital status on the last day of the year (December 31, 2015) determines your marital status for the entire year for the purposes of income tax filing.

Married in 2015?
First, let’s go over some of the IRS rules and benefits for all of those couples getting married this year.  
If you get married at any point in 2015, you are now required to file taxes either as married filing separately (MFS) or married filing jointly (MFJ) for any income you earn in 2015. What this means is that when you go to file taxes next April, you no longer have the option of filing as a single person.
For most couples filing a tax return as married filing jointly provides a beneficial tax outcome. Married couples filing a joint return can claim two personal exemptions instead of one and can use a standard deduction of $12,400 verses the single taxpayer deduction of $6,200. You can also choose to itemize your deductions for benefits like mortgage interest payments.
Another benefit of getting married this year is that spouses can give each other unlimited gifts without the gift tax limits.
All being said, the change in status is not necessarily a win for many professionals as the marriage penalty can start to impact your tax rate. You can determine if you are going to be impacted by the marriage penalty.  

Divorced in 2015
Under the IRS rules, your marital status on the last day of the year or December 31, 2015 determines your marital status for the entire year.
In California, the Court will not issue an official decree of divorce before 6 months from the date of filing and serving of the Petition for dissolution (California Family Code 2339). This means you need to start the process (file) before July 1st.
It is important to remember that most of the biggest taxable events are not necessarily part of the divorce process itself, but actually occur in the years that follow as a result of the divorce settlement, like the sale of a home, capital gains, and who will be able to claim the children as dependents. These won’t really be affected by whether you get divorced in 2015 or 2016.
Here are some common tax credits and exemptions that could impact your decision to file before June 30th, 2015, though:
 

Children
If you have children, one important tax issue to determine who will take the deductions for a dependent child. This is because the tax implications are important. For each dependent a parent can deduct $3,900 from their federal taxable income.  In order to qualify, the child must live with the parent claiming the exemption more than half of the year and be under the age of 19 at the end of the year. Often parents will alternate who gets to claim the exemption from year to year.

If you are able to get a final divorce decree by December 31, 2015 and file as single another benefit may be that one spouse can claim Head of Household. In order to qualify for this status, you and your ex must have lived apart for the last six months and the claiming parent also has to pay more than half of household costs. In this case, the other spouse files his/her return as single.

Mortgages
Another tax benefit to be aware of is the payment of mortgages.  The person who stays in the marital home may be able to take advantage of one of the most popular tax credits which is the mortgage interest deduction. The mortgage interest deduction is the part of your monthly payment that covers the interest you pay on the mortgage.

Property Taxes
The last issue to be aware of is property taxes. If both parties have made any estimated property tax payments this year, then you have two options. First, one party can claim all of the payments or second the payments can be divided between the parties pursuant to an agreement. These payments should be reflected on your tax return.
Tax issues can be complicated, especially when you are changing your filing status from married to single. Consult with a family law attorney and tax professional to make sure you are aware of the risks and benefits associated with changing your tax status.